The American Hospital Association (AHA) is reinforcing its longstanding position against the Department of Health and Human Services’ (HHS') site-neutral payments with new research suggesting hospital outpatient departments are treating poorer, more complex Medicare patients than independent physicians' offices are.
The study, which was conducted for the AHA by KNG Health Consulting and published on its website, reviewed claims from a 5% sample of Medicare beneficiaries who had at least one visit to an outpatient setting between Jan. 1, 2012, and June 3, 2019.
Here, beneficiaries who received the majority of their outpatient care at a hospital outpatient department (HOPD) were more likely to be non-white, come from lower-income communities and be dual-eligible. HOPDs saw a greater proportion of beneficiaries that were aged either older than 85 years or younger than 65 years (denoting certain qualifying conditions) and were more often enrolled in Medicare due to disability or end-stage renal disease qualifications, according to the research.
Further, the organization’s research found beneficiaries who more often turned to HOPDs had a greater number of or more severe comorbidities. This group also was more likely to have used an emergency department or a short-term acute care hospital within the 90 days preceding their outpatient visit.
“Patients of higher complexity may require a greater level of care than patients of lower complexity,” the AHA’s report reads. “To the extent that these differences result in variations in the cost of care, site-neutral payments may have adverse effects on patient access to care.”
RELATED: Appeals court rules HHS has authority to implement site-neutral payments, dealing blow to hospitals
The linchpin of AHA’s interest in the two settings is a legal back and forth regarding the 2019 Outpatient Prospective Payment System rule (PDF), which brings reimbursement to each setting in line with the end goal of reducing payment disparity.
AHA, the Association of American Medical Colleges and others quickly filed the first legal complaint against the rule, kicking off a series of alternating rulings across the courts. Appeals court decisions have sided with HHS on the rule, which led AHA to request judicial review by the Supreme Court in February. Dozens of state and regional hospital associations have supported the AHA’s request.
At stake is about $800 million in payments that the Centers for Medicare & Medicaid Services (CMS) said it would be saving in 2020 by dropping HOPD payments down to what it reimburses independent physicians' offices. The Medicare Payment Advisory Commission has also pointed to varying reimbursement payments as a major factor in physician-hospital consolidation.
While this contest has yet to reach its conclusion, provider groups did celebrate a reimbursement win this week when President Joe Biden signed legislation pausing a 2% cut to Medicare payments through the rest of 2021. Stakeholders such as the Federation of American Hospitals said the action provided “a vital lifeline” to organizations stretching their resources throughout the COVID-19 pandemic.